California board approves contentious cap-and-trade overhaul
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Sacramento. On Friday the California Air Resources Board approved an overhaul of the state's cap-and-trade program, voting to allow up to roughly $3.5 billion in free pollution allowances for manufacturers and oil refineries that build emission-reduction projects. Ten board members adopted the measure after two days of public hearings, following the Legislature and Gov. Gavin Newsom's prior reauthorization through 2045. The decision drew protests from environmental groups this week, who said it would weaken efforts to curb greenhouse gas emissions, while the oil industry supported the changes as necessary to avoid higher energy costs. The Legislative Analyst's Office projected quarterly auction revenue could fall from about $4 billion annually to roughly $2 billion, setting up a potential budget dispute in Sacramento.
Prepared by Olivia Bennett and reviewed by editorial team.
Timeline of Events
- Last year: California Legislature and Gov. Newsom reauthorized cap-and-trade through 2045.
- Industry lobbied regulators seeking flexibility amid rising gas prices.
- Two days of CARB hearings included extensive public comment before the vote.
- Friday: CARB approved changes allowing up to roughly $3.5 billion in free allowances.
- LAO projected auction revenue could drop from about $4 billion to $2 billion, prompting budget tensions.
Why This Matters to You
This cap-and-trade overhaul could affect your wallet. If the oil industry avoids higher energy costs, you might see stable gas prices. But, the state's budget could take a hit. That may impact public services. Keep an eye on your local news for updates.
The Bottom Line
The CARB's decision is a balancing act between environmental goals and economic realities. It's controversial, with potential impacts on greenhouse gas emissions and state revenue. If you're in California, it's worth forwarding this to anyone concerned about the environment or state budget.
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Oil refiners and large manufacturers will receive free allowances worth up to roughly $3.5 billion if they build qualifying emission-reduction projects, reducing their compliance costs and providing regulatory flexibility.
Environmental groups, state climate programs, and anticipated auction revenues may suffer as critics say the changes weaken emissions limits and could reduce quarterly auction income from about $4 billion a year to roughly $2 billion.
Coverage of Story:
From Left
California approves carbon market overhaul opposed by environmentalists
San Francisco Chronicle
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